According to a Summary of the Payroll of Scotland Company

question 92

Multiple Choice

According to a summary of the payroll of Scotland Company, total salaries were $500,000. Assume that social security taxes are payable at a 6% rate and Medicare taxes are payable at a 1.5% rate with no maximum earnings. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (5.4%) and federal (0.8%) unemployment taxes. The journal entry to record accrued salaries would include a

• A) debit to Salaries Payable of $365,250
• B) credit to Salaries Payable of $364,500
• C) debit to Salaries Expense of $364,500
• D) credit to Salaries Expense of $365,250

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Definitions:

Pricing Strategies

Approaches and methodologies businesses use to set the prices of their products or services based on costs, market demand, competitor prices, and other factors.

Loan Covenant

A condition in a commercial loan agreement that requires the borrower to fulfill certain conditions, or restricts certain activities, to protect the lender's interests.

Accounting Measure

A quantifiable financial metric used to assess a company's performance or financial health, based on accounting records.

Financial Statements

Reports that summarize the financial condition and operations of a business.